Average house prices were forecast to rise by 3 per cent in September, by 2.7 per cent in October and for November by 2.1 per cent over the same months in 2018.
The Reallymoving Property Price Index produced the forecasts based on analysis of 90,000 registrations for conveyancing quotes on residential properties priced between £40,000 and £2m during June, July and August.
The registrations give an early indication of what will happen with actual transaction values when deals complete on average three months after property buyers seek conveyancing quotes through the Reallymove website.
“We’re confident that the data is reliable because we see an incredibly close relationship with the Land Registry’s price data, when taking account of the three-month time lag,” said Rob Houghton, chief executive at Reallymoving (pictured). He estimated that the company’s conveyancing quote registrations cover about 8 per cent of the UK housing market by number of transactions.
The forecast suggested that house prices will fall month-on-month in September by 1.4 per cent, in October by 0.3 per cent and by 1 per cent in November.
The index pegged average prices for September at £297,953 for October it’s £297,155 and November £294,245.
‘Surprising resilience’
Reallymoving’s index draws on analysis based on raw data averages, data adjusted for seasonality and mix-adjusted numbers that take account of features of the market to do with property type and geo-location — such as more larger house moves taking place during the summer school holidays.
“With all three, the correlation is pretty consistent with the Land Registry,” said Houghton.
“If you’re a consumer, the raw numbers might be the most relevant. If you’re trying to look at underlying changes in the housing market and how resilient it is to the current political turmoil then the adjusted numbers are probably more relevant.
“Although we are all incredibly nervous about what might happen with Brexit and what the impact might be, property prices seem to be pretty resilient. On an adjusted basis, they are showing slight increases over the next three months, which to be honest is quite surprising.
“I’d have thought people would be being quite cautious. Volumes are down a bit year-on-year because of that, but it doesn’t seem to be having a significant impact on overall prices,” Houghton said.
Regional forecasts
House prices were forecast to decline in six out of 12 regions during the three months from September to November.
The North East was expected to see the biggest fall, at minus 13.5 per cent, followed by the North West at minus 7.5 per cent. Of the six regions forecast a price increase, Wales topped the growth with an 8.7 per cent rise, followed by the East Midlands at 5.8 per cent.
In London, the average price was forecast to rise by 1.5 per cent over the three months, with a dip of 2.3 per cent in November reflecting buyer caution during August.
An earlier Reallymoving forecast, published in June, predicted that house prices would rise by 3 per cent in August to reach £299,300. In the event, actual monthly growth was 3.2 per cent and the average price of a completed deal was £302,153.
“We believe that our data is a reliable enough sample to give us short-term forecasts that we can be confident in,” Houghton said.
